A Ringwood East supermarket offered with a leaseback to a popular IGA outlet has sold for $7.34 million.
The property was contested by multiple bidders at auction and the sale price reflects a 5.4 per cent yield.
It is selling to a Chinese investor who typically develops residential property.
Known as Paul’s SUPA IGA, at 82-90 Railway Avenue, the investment was offloaded by the Corcoris family, which had been running the IGA as owner-occupier since the 1970s.
The parcel spreads 2135 square metres of land zoned Commercial 1 making it appropriate for residential redevelopment.
IGA offered the property with a 10-year leaseback, paying a starting rent of approximately $400,000 per annum net.
“The supermarket was a suitable asset for both domestic and international investors, given the long lease tenure and the commercial land parcel being opposite the Ringwood East train station,” Mr Du Rieu said.
Mr Tong added that there were three key aspects which drew interest from buyers: the lease term, the position and the underlying land holding.
“If you compare returns investors are getting on other investments in the market, it is clear to see why commercial property is still in demand,” the agent said.
“The ultimate purchaser had historically only been in residential developments, however they wanted to begin diversifying into more income producing investments and IGA Ringwood East ticked the boxes”.
Last September we reported that a local family paid more than $11 million for a string of shops and offices between 154-166 Maroondah Highway, Ringwood, about 350 metres from the Ringwood train station.